KALYANIFRG Q4 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹238 Cr
verification pending
Revenue YoY
—
reported change
EBITDA
₹31.58 Cr
latest reported figure
Source
bse pending
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Kalyani Forge delivered a strong Q4 FY26 with 15.2% EBITDA margin for the second consecutive quarter, establishing this as the new profitability floor. FY26 PAT of 9.32 crores represents the highest in approximately 14 years. The margin expansion to 13.3% for FY26 (up from 11.1%) was driven by deliberate exit of ~40 crores of non-fit business, VIDI council cost optimization initiatives, and a new plant engineering vertical addressing legacy operational inefficiencies. Revenue remained flat at 238 crores as non-profitable business was phased out, but core OEM revenues grew to 37.3 crores—the highest in several quarters. Three major order wins including XCV high-volume axle business (20 crores annual revenue) from SKF and Schaeffler are scheduled to ramp from Q1 FY27. Capex of 23.44 crores was deployed in FY26 with FY27 plan at 30 crores (60% allocated to growth areas). Management targets 20% EBITDA margin by FY27 year-end and steady-state revenue of 300 crores based on fixed asset base. Working capital remains stretched with cash conversion cycle at 176 days, targeting 120-130 days. Key risk: revenue growth execution amid persistent working capital pressure and elevated debt-to-equity at 1.11.
Colored figures show movement against the previous available record.
Guidance to track
- Management stated 15% is now the floor and baseline minimum, with a clear target to move closer to 20% EBITDA margin by end of FY27 or early FY28, driven by business mix optimization and operational efficiency gains.
- New capex plan of 30 crores with 60% allocation to future growth areas (drive line, axle, new programs), 5 crores for existing business, and 10 crores each for ramp-up and new business.
- At fixed asset turnover ratio of 3x with current PPE of ~97 crores (including CWIP), management sees 300 crores as achievable steady-state revenue level.
- Target reduction from current elevated levels through improved credit controls, inventory rationalization, and better payables management.
Risks flagged
- Revenue remained flat at 238 crores despite phasing out ~40 crores of non-fit business, indicating the need for robust volume growth from new OEM programs to offset continued revenue headwinds and achieve targeted 300 crores steady-state.
- Receivables have been increasing faster than sales bookings due to JIT stocking commitments for key OEMs. Cash conversion cycle at 176 days remains significantly above the 120-130 day target, requiring close monitoring.
- Debt-to-equity ratio increased to 1.11 from growth capex and working capital requirements. Management targets maintaining 1.0-1.2x range, but equity funding discussions are still in early stages with potential investors.
- Export share dropped to 11% in Q4 versus historical levels due to deliberate pruning of low-margin legacy export business. New export orders are in pipeline but face ramp-up timelines before contributing meaningfully.
Key quotes
- We are targeting 20% EBITDA margin. I'd say in a year's time. By end of this financial year or early next financial year, we should move upwards closer to 20%.
- Approximately 40 crores of non-fit business has been phased out in FY26. In spite of removing non-profitable or difficult to scale businesses out of the entire portfolio, we were still able to grow the core business revenues and that's how we have achieved the same or a stable revenue for the year.
- 15% is now a floor. It's a baseline and it's a minimum that we need to be achieving going forward.
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